WHAT IS PONZI SCHEME?
A ponzi scheme is a sketchy and unsustainable business model, where a few top-level members recruit newer members, who pay upfront costs up the chain, to those who enrolled them. In a typical ponzi scheme, you pay to join. The scheme relies on you convincing other people to join up and to part with their money as well. The money received from the new recruits is used to pay off the earliest investors. The new members are then promised earnings if they are able to recruit more people into the scheme.
In reality, the number of people willing to join the scheme, and therefore the amount of money coming into the scheme, will dry up very quickly.
Some ponzi scheme promoters disguise their true purpose by introducing products that are overpriced, of poor quality, difficult to sell or of little value. Making money out of recruitment is still their main aim.
Often ponzi scams are illegal in some countries.